What's the Deal

French Fashion Brand Gone Wild About NYC

Zadig & Voltaire, a French fashion brand, has hinted at plans to kick off its U.S. expansion with a New York flagship. Now those schemes have become reality.

The company has signed a lease for its U.S. flagship, at the corner of Mercer and Broome streets in SoHo, according to real-estate executives familiar with the matter.

The company already has locations at 153 Mercer St. in SoHo, as well as on Bleecker Street, Madison Avenue and the Meatpacking District. The store at Mercer and Broome, with 4,500-square-feet of ground-floor space and a 5,000-square-foot basement, will be Zadig & Voltaire's largest in the U.S., in a high-profile spot formerly occupied by Gourmet Garage.

Zadig & Voltaire is "moving into the states right now," Thierry Gillier, the company's chief executive and founder, told The Wall Street Journal in September. He hinted then that the company would be opening its fourth store in New York, and its U.S. flagship. "New York is a good place for Zadig because it's wild; there is this energy in New York," he said.

Zadig & Voltaire—named after the novel "Zadig ou la Destinée" by Voltaire—was represented by RKF's Joshua Strauss and Greg Covey. Kes Hotaling of the Maverick Group represented the owner of 453 Broome St., the International Olive Company.

SoHo has become increasingly desirable for high-fashion companies, including Alexander Wang and Vivian Tam, thanks to a mix of affluent residents and European tourists. Asking rents have climbed to about $150 to $250 a square foot, even on desirable side streets, according to brokers.

—Laura Kusisto

ENLARGE

A rendering of the new Armani Exchange store to open at City Point.
Cook + Fox Architects

Armani Comes to City Point

Armani Exchange will be the first retailer to open in the recently completed first phase of the massive City Point project in downtown Brooklyn.

The affordable, youth-focused stepchild of the famous fashion label has signed a lease for 6,500 square feet on the corner of Fulton and Gold streets and will open in November, in time for the Christmas shopping season.

Armani Exchange, created by Italian designer Giorgio Armani, opened its first store in SoHo in 1991. The brand now has 13 stores in the New York area, including one other location in Brooklyn at Kings Plaza.

"Brooklyn is an energetic and vibrant place with fashion-minded young people, perfect for the Armani Exchange brand and lifestyle," said Harlan Bratcher, president and chief executive of Armani Exchange, in a written statement.

The City Point project is one of the largest developments under way in Brooklyn. Its plan calls for 1.6 million square feet of retail, office and residential space to be built by 2018.

This spring, Century 21, the popular discount designer retailer, signed a 125,000-square-foot deal to anchor City Point, which is being developed by a partnership led by Acadia Realty Trust. That store isn't set to open until the fall of 2015.

Armani Exchange's new location will face onto Fulton Street, a strip that has seen a dramatic transformation from a collection of cheap cellphone outlets and fast-food joints into Brooklyn's main answer to Manhattan's popular shopping districts. Gap, Aldo, H&M and Shake Shack have opened or signed deals on the Fulton Mall in recent months.

"City Point is the perfect project to reflect the diversity of downtown Brooklyn today and is a centerpiece in the area's resurgence," said Downtown Brooklyn Partnership President Tucker Reed, in a statement.

—Laura Kusisto

Upper West Side Price Hike

Strong demand for rental apartment buildings is driving prices higher and convincing more owners to put property on the market.

Consider the 12-story building at 2410-2418 Broadway which has 46 apartments and 4,300 square feet of retail space. The 13-person partnership that has owned it for 70 years has put it up for sale through Eastern Consolidated and Besen & Associates, with a price tag of $52.5 million.

If a buyer pays that amount, their initial return will be less than 3%, a low so-called "capitalization rate" even for the trendy Upper West Side. "In the past five to six months, there's been a lot of transactions at low cap rates—3% and even high twos," Patricia Garcia, of Eastern Consolidated, said.

She added that the building's main appeal is that it is on a prime corner at Broadway and West 89th Street. Also the apartments "are extraordinarily big and renting at lower than average rents at the moment."

All but one of the building's 46 residential units is occupied, and 71% are rent regulated, with average monthly rents of $1,294.

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